<%@LANGUAGE="JAVASCRIPT" CODEPAGE="1252"%> Iowa Department of Revenue electronic newsletter: Iowa Tax eNews
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e-News
March 2012 ------------------------------------------------------------------------------------------------------------------------------------------------

In This Issue

Internal Revenue Code (IRC) coupling bill update

On March 7, 2012, Governor Branstad signed House File 2150. This legislation conforms Iowa's tax laws to the Internal Revenue Code (IRC) in effect on January 1, 2012, for tax years beginning on or after January 1, 2011. It provides that all federal tax changes made by Congress in 2011 related to the calculation of adjusted gross income for individuals and federal taxable income for corporations will be allowed for Iowa income tax purposes.

NOTE: Iowa remains decoupled with federal "bonus depreciation" for the 2011 and 2012 tax years. The Iowa legislature decoupled with these provisions in legislation passed last year, Senate File 512, and no change was made in House File 2150 to the decoupling with bonus deprecation. Form IA 4562A must be completed for the 2011 and 2012 tax years to reflect the differences between federal and Iowa depreciation.

IDR to launch Twitter accounts

In April, the Department plans to launch three Twitter accounts targeting the following groups:

  • Business Taxpayers
  • Individual Income Taxpayers
  • Tax Professionals

Watch our Web site for more details.

Survey available on IDR Web site

A survey aimed primarily at tax professionals will be available on the Department's Web site from April 2 through May 15. The short, 10 question, survey is designed to obtain feedback on the Department's efforts to provide information and how improvements can be made.

Please take a few moments to complete the survey which will be found in the Popular Links section of the IDR home page at www.iowa.gov/tax.

Your input is highly valued!

Capital Gain Deduction - new flowchart & checklist

The Department is pleased to announce updated capital gain deduction flowcharts and a new capital gain deduction checklist have been added to our Web site:

http://www.iowa.gov/tax/forms/cgcode.html

http://www.iowa.gov/tax/forms/capgains.html

It is our hope the new information will make it easier for taxpayers to understand what does, and doesn't, qualify for the deduction.

Income tax return extensions and payment plans

Automatic Extension of Time to File Income Tax Returns
Iowa does not have an application to extend the time to file your income tax return. In addition, we do not accept a federal extension.

Instead, if you have paid at least 90 percent of the tax you owe by the due date of your return, you automatically have an additional six months to file your return and pay the additional tax due with no penalty. Interest continues to accrue on unpaid tax during the extension period.

If you need to make a payment to meet the 90 percent requirement, it must be paid or postmarked by April 30 for calendar year filers. You can make your payment electronically through our eFile & Pay system or by mail using form 41-137 (pdf) for individuals, or form 42-019 (pdf) for corporations.

Payment Plans
Iowa does not have a payment plan option for tax shown due on the return. Pay as much as you can, and you will be billed for the balance due. Payment plans can be established only after a bill has been issued and has gone to our collections section for action.

Even if you cannot pay the amount due, file the return on time anyway. Filing the return by the due date will reduce any late payment penalty from 10 percent to 5 percent.

Sales tax permit need not be posted

The Department provides a letter to new applicants for a sales tax permit containing their Business eFile Number (BEN), permit number, and a printed permit. They are not required to display the printed permit; however, it should be readily available to prove they have one.

If your active permit is lost or destroyed, use the Change, Correction, or Cancellation of Tax Permit form to request another copy of the letter containing your Business eFile Number (BEN), your permit number, and a printed permit.

Barcoding program in place for 2011 forms

The IDR has implemented a barcoding program for tax year 2011. Returns filed on paper that are created using participating computer software vendors or printed from the IDR Web site now contain a barcode to assist in processing those returns. Barcodes appear in the upper right and lower left on page 1 of the IA1040, as well as the lower left on many other Iowa individual income tax forms and schedules.

When the Department receives your paper tax return with barcodes, an image of the return and the tax information is scanned directly into the tax system. This ensures your return is processed quickly and accurately, saving the Department time and money.

IDR offers 2D Barcode in addition to electronic filing of individual income tax returns. eFiling continues to be the best customer option for a fast and easy refund!

Vegetable seeds, plants and fruit trees

If your customer will be consuming the produce from the seeds, plants or trees, the sale is taxable.

If your customer will be selling the produce, the sale is exempt. Be sure to get a Sales Tax Exemption Certificate (pdf) from your customer.

Do you buy or sell at one of Iowa's many farmers markets? Be sure to take a look at our brochure: http://www.iowa.gov/tax/educate/31039.pdf

Landscaping, lawn mowing and lawn care

The services of landscaping, lawn mowing, and lawn care are taxable unless performed on or in connection with new construction, reconstruction, alteration, expansion, or remodeling of a building or structure.

"Lawn care" includes but is not limited to the following services: mowing, trimming, watering, fertilizing, reseeding, resodding, and killing of insects, moles, other vermin, weeds, or fungi which may be threatening a lawn.

People who mow lawns are providing a taxable service regardless of their ages. However, your services will be exempt if:

  • you are the owner of your business and the only person performing the service, and
  • you are the owner of the business and a full-time student, and
  • the total gross receipts do not exceed $5,000 for a calendar year.

Please see our handout on landscaping and lawn care. (pdf)

Can you eFile for free?

  • Are you 25 or younger?
  • Are you 65 or older?
  • Are you in the military?
  • Do you qualify for earned income credit?

Find out at www.iowa.gov/tax!

File your federal & Iowa returns at the same time from links on our Web site.

Get your refund in days instead of weeks.
eFiling is fast, safe, and easy.